Real Estate Talk: Buying a Condo

Rules and formalities to follow when purchasing a divided or undivided condominium

By Joseph Marovitch

Updated May 17, 2023

I sold the home of a wonderful older couple who had lived in the same house for many years. Their children grew up in the house and moved out a while back. There were many memories in the house, however, the wife did not want to maintain the property now that the kids were gone. The husband did not want to move and was very rigid in his ways.

Nonetheless, he agreed with his wife, and they requested I find a condominium with two bedrooms, two bathrooms, two garages, and all the amenities such as a doorman, 24-hour security, pool, gym, and an elevator in a more modern construction. We only had a month to find a new location since the new owners would be taking possession in thirty days and paid a premium for the option to acquire the house sooner.

A condo can be described as shared living in the same building. The condo can be a duplex, fourplex, or a twenty-unit plus multi-plex. There are two types of condominiums, divided and undivided.

Shortly thereafter, we found a prestigious property located in a well-maintained building constructed in 1987 with all the services requested. The grounds had a stunning garden with a fountain and places to sit. The condo had beautifully stained hardwood floors, marble countertops, and excellent views. We purchased the property and my client moved.

A few months later, the husband called me to say thanks. He told me their new home was beautiful and much easier to maintain. There was no grass to cut, snow to remove and no stairs to navigate. All needs were taken care of by the doorman, security, and administration. The couple were able to leave their home and travel with no worries. Their reason for purchasing a condo is one of many. For other buyers, a condo is a more affordable option these days than a single home. For others, it can be an investment.

A condo can be described as shared living in the same building. The condo can be a duplex, fourplex, or a twenty-unit plus multi-plex. There are two types of condominiums, divided and undivided.

A divided condo is the preference of most buyers. A divided condo is a building in which the owner owns the unit they are living in. There are shared expenses such as maintenance of common areas, insurance for the building, and any amenities such as a doorman, pool, or gym. However, since the unit belongs to the owner, if financed by a financial institution, the owner can have their own mortgage and place a down payment of as little as 5%.

If the condo is undivided, this means each owner owns a share of the building and not their own unit. Few banks are willing to finance an undivided condo and those that do, require the buyer to place a minimum of 20% as a down payment. The advantages of an undivided condo are they tend to be less expensive and if the owners ever do decide to divide the units, the value increases significantly.

‘A divided condo is the preference of most buyers. A divided condo is a building in which the owner owns the unit they are living in.’

Buyers have many options to choose from. However, they can narrow their choice with several of their own criteria and three general rules.

After deciding how many bedrooms and bathrooms are required along with the number of square feet, parking and location needed, the rules to follow are:

1. Choose a condo that is built by a developer who has been in the business for some time and has a proven track record for using good materials and delivering on time.
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2. Choose a location that is in demand and easy to sell later. Griffintown, by the canal, by the Atwater market, Westmount, NDG, and the Golden Square Mile are all good locations. Areas that are developing with new daycares, shopping centres, restaurants and boutiques are great.
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3. Do not over-pay for a condo. Purchase at market value or below. Overpaying for a condo and especially a new construction, with taxes on top of the purchase price, will be very difficult to recoup when you sell unless you keep the condo for a very long period. As condos are usually part of the “circle of life”, that is you sell them as soon as you get married or have children, you most likely will not keep the condo long enough to profit if you overpaid.

Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, click here.

Have a great week!

Next article: Always consider resale when purchasing

State Of The Market

CPI today (inflation rate) 4.4%
Bank of Canada interest rate 4.5%

The inflation rate rose from 4.3% to 4.4% in April. The increase is attributed to higher mortgage rates and rising rents, groceries, and gas. The Bank of Canada expected inflation to reduce and is aiming for 2%. However, with an increase in the inflation rate, we can expect further interest rate hikes in the future. Hopefully, this is just a hiccup, and the consumer price index will decrease. Otherwise, with further interest rate hikes, we may see a recession.

Have a great week!

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Other articles by Joseph Marovitch